According to Pew Charitable Trusts, Hawaii was the first jurisdiction to address the threat that litter poses to the environment, by way of a ban on the use of plastic bags at retail checkouts. Hawaii’s ban occurred county by county, with Honolulu County being the last of the four to do so, in the spring of 2012, which took effect on July 1, 2015. In 2012, there had not yet been any state-wide measures, but cities and counties were taking action. For instance, in 2007, San Francisco became the first city to regulate the use of bags at checkout when it imposed a $.10 tax on paper bags. And in 2009, Washington DC passed a $.05 cent tax on disposable paper and plastic carryout bags.

The research

Washington D.C.’s bag tax followed a 2008 study prepared by the Anacostia Watershed Society. The study asserts that the Anacostia River, which is “an urban tributary to the Potomac River, has a severe problem with excessive trash,” to the River’s detriment. The District of Columbia, and the state of Maryland, joined forces to study the Anacostia “as a model of how to reduce trash in a river and move toward a trash free Potomac Watershed.”

According to the study, rainstorm overflow was among the problems that pollution in the waterway was causing, leading to the discharge of sanitary sewage, storm water, and trash into the river. 85 percent of this pollution consisted of plastic bags, Styrofoam, potato chip and candy bar packaging, bottles, and cans.In tributary streams, plastic bag litter dominated, though the other trash categories were also prevalent.

In proposing solutions, the study contended that “[t]he most significant trash reductions can occur from political action. The single largest component of trash in the streams, and most likely in the river, is plastic bags. Legislation requiring convenience store, grocery and food items bags to be biodegradable or to eliminate the use of any kind of ‘free’ bag will effectively remove 47% of the trash from the tributaries and 21% from the main stem of the river.”Absent some kind of legislative action, the study estimated that it would cost $32 million “to clean up other people’s poor disposal habits in the Anacostia basin alone.”

More recently, in August of 2016, the University of New Hampshire evaluated the various regulatory solutions that jurisdictions have imposed to manage the “ubiquitous plastic bag” problem. The resulting research, published on BioCycle.net, concluded that “bans on plastic bags have the potential to work, but may offer loopholes that harm the environment.” For example, measures that merely banned plastic bags of certain thicknesses did nothing but cause “higher usage of heavier plastic bags, which found their way into the waste stream.” But “[t]axes had a mostly desired effect on plastic bag usage.”

Who is doing what

This summer, the National Conference of State Legislatures (NCSL) posted an article that covered plastic and paper bag legislation. Not surprisingly, California was the first to impose state-wide laws, which subjected recycled paper bags, reusable plastic bags, and compostable bags at certain locations to a $.10 minimum charge, and completely banned single-use plastic bags at large retail stores.

NCSL observed that between 2015 and 2016, 23 states proposed 77 bills. In 2017, only three, Arizona, Idaho, and Missouri, enacted legislation. Interestingly, all three prohibit “local governments from regulating the sale or use of plastic bags, including the imposition of any fees or taxes.”

As of July of this year, jurisdictions that have some sort of ban or fee on the use of plastic bags include the following, summarized the NCSL piece:

Austin

Cambridge, Mass.

Chicago

Los Angeles

San Francisco

Seattle

Boulder, Colo.

Brownsville, Texas

Montgomery County, Md.

New York, N.Y.

Portland, Maine

Washington D.C

Cuyahoga County

As has been widely reported, Ohio’s Cuyahoga County is now officially considering a plastic bag tax. Sunny Simon, the chair of the Council’s Education, Environment & Sustainability Committee, has proposed Ordinance No. O2017-0006, which would enact a fee of $.10 “for each Carryout Bag that a Retail Establishment provides to the customer.” The retailer must collect the fees and remit them to the Cuyahoga County Fiscal Officer by the 20th day of each month, subject to interest and penalties for the failure to do so.

The Ordinance cites research showing that “the precipitous increase in plastic production and plastic consumption over the past seventy years has resulted in approximately 269,000 tons of globally distributed plastic waste pollution, particularly in oceans, lakes, and other marine waterways.” Proceeds from the bag tax will make up an Environmental Remediation Fund, to “provide for critical pollution prevention, remediation, and sustainability services.”

DAVID KALL

DAVID EBERSOLE

I am a recognized tax advisor who takes a team approach to working with clients to achieve business goals. I leverage my public sector background to understand all perspectives and leave no tax planning or tax controversy stone unturned.